Institutional adaptability to redress electricity infrastructure vulnerability due to climate change: A non-technical summary for policy makers

The objectives of this project are to examine the adaptive capacity of existing institutional arrangements in the National Electricity Market (NEM) to existing and predicted climate change conditions. Specifically the project aims to: 1. identify climate change adaptation issues in the NEM; 1. analyse climate change impacts on reliability in the NEM under alternative climate change scenarios to 2030, particularly what adaptation strategies the power generation and supply network infrastructure will need; and 3. assess the robustness of the institutional arrangements that supports effective adaptation. This report provides an extensive literature review to inform and to develop research questions for the project’s four forthcoming reports: 1. the impact of climate change on electricity demand; 2. the impact of climate change on electricity generation capacity and transmission networks; 3. analysing the effects of changes in water availability on electricity demand-supply; and 4. assessing the current institutional arrangements for the development of electricity infrastructure to inform more flexible arrangements for effective adaptation. The review finds that four factors are hindering or required for adaptation to climate change: 1. fragmentation of the NEM both politically and economically; 2. accelerated deterioration of the transmission and distribution infrastructure due to climate change requiring the deployment of technology to defer investment in transmission and distribution; 3. lacking mechanisms to develop a diversified portfolio of generation technologies and energy sources to reduce supply risk; and 4. failing to model and to treat the NEM as a node based entity rather than state based. Section 2 reviews the literature. Section 3 recommends solutions to the four factors of maladaption. Section 4 discusses research questions to test these solutions, which the forthcoming reports will address.